A month has gone by since the last earnings report for UGI (UGI). Shares have added about 6.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is UGI due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
UGI Q2 Earnings & Revenues Lag Estimates, Sales Increase Y/Y
UGI Corporation reported second-quarter fiscal 2026 adjusted earnings of $2.09 per share, which missed the Zacks Consensus Estimate of $2.27 by 7.93%. The bottom line decreased 5.43% from $2.21 in the year-ago quarter.
GAAP earnings per share in the fiscal second quarter were $2.33 compared with $2.19 in the year-ago quarter.
Total Revenues of UGI
Revenues of $2.69 billion missed the Zacks Consensus Estimate of $3.13 billion by 14.16%. However, the top line increased 0.71% from the year-ago quarter’s $2.67 billion.
Highlights of UGI’s Q2 Release
UGI’s earnings before interest expense and income tax (EBIT) for the second quarter of fiscal 2026 were $771 million, up 10.78% from $696 million in the prior year.
The company’s interest expenses were $111 million, up 8.82% compared with $102 million in the year-ago quarter.
UGI’s Development After Q2
UGI entered into a definitive agreement to sell its electric division for about $470 million, subject to working-capital adjustments. The transaction is expected to be completed in the second quarter of fiscal 2027.
The company entered into a strategic partnership with Prime Data Centers to build large-scale natural gas infrastructure in northern Pennsylvania. The project is expected to support the gas demand of more than 100,000 dekatherms per day over the next three to five years.
UGI launched online sales of AmeriGas propane cylinders through Amazon in select cities. The company plans to gradually expand the service across existing home-delivery markets during fiscal 2026 by leveraging its established direct-to-consumer delivery network.
UGI’s Segmental Results
AmeriGas Propane: EBIT of $156 million in the second quarter of fiscal 2026 was up 1.30% from the year-ago level.
UGI International: EBIT of $132 million in the second quarter of fiscal 2026 was down 7.69% from the year-ago level.
Midstream & Marketing: EBIT of $150 million in the second quarter of fiscal 2026 was down 2.60% from the year-ago level.
UGI Utilities: EBIT of $250 million in the second quarter of fiscal 2026 was up 3.73% year over year.
UGI’s Financial Highlights
As of March 31, 2026, UGI reported a strong balance sheet with approximately $2.1 billion in available liquidity.
As of March 31, 2026, UGI had cash and cash equivalents of $530 million compared with $355 million as of Sept. 30, 2025.
Long-term debt as of March 31, 2026 was $5.99 billion compared with $6.53 billion as of Sept. 30, 2025.
Net cash flow provided by operating activities in the first six months of fiscal 2026 was $730 million compared with $848 million in the year-ago period.
UGI's FY26 Guidance
UGI raised its fiscal 2026 adjusted earnings to the range of $2.75-$2.90 per share. The Zacks Consensus Estimate is pegged at $3.05, which is above the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -105.88% due to these changes.
VGM Scores
At this time, UGI has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock has a grade of A on the value side, putting it in the top quintile for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise UGI has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).